A federal jury on August 9 found Pacific Gas & Electric guilty of violating federal pipeline safety regulations before a fatal natural-gas pipeline explosion in San Bruno, Calif., in 2010 and, further, of obstructing investigators after the incident.
A buried 30-in. steel natural-gas transmission pipe unexpectedly ruptured on Sept. 9, 2010, causing an explosion and fire that killed eight people and destroyed 38 homes in the residential neighborhood near San Francisco International Airport. The pipeline’s owner, PG&E, initially said it had been in compliance with federal pipeline safety regulations, but a 2011 investigation by the National Transportation Safety Board found inconsistent record-keeping and inadequate risk-assessment policies.
The failure of the pipe was traced to a seam-weld defect on the pipeline present during its installation in 1956, according to the NTSB report. Prosecutors alleged that PG&E willfully failed to assess failure risks within its pipeline networks, failing to comply with regulations laid out by the U.S. Dept. of Transportation's Pipeline and Hazardous Materials Administration.
The obstruction-of-justice charge was added later, after investigators discovered PG&E attempted to mislead the NTSB during its investigation. At the time of the blast, PG&E was operating under a pipeline safety-assessment policy that did not prioritize or properly assess the risk posed by many of its older natural-gas systems. After submitting this plan NTSB investigators, PG&E attempted to withdraw it, claiming it was an unapproved draft, a move that lead to the obstruction-of-justice charge.
“In the aftermath of the explosion, our office, along with the District Attorney of San Mateo and the California Attorney General’s Office, charted a course to examine whether PG&E had complied with the federal regulations designed to keep people safe or willfully disregarded those regulations,” said Brian J. Stretch, U.S. attorney for the Northern District of California in a press statement after the verdict. “The jury has determined that PG&E management chose willfully not to follow certain of those regulations.”
Pacific Gas & Electric, California’s largest utility, was convicted on five of 11 counts, including not keeping proper records of potential deficiencies in its gas pipelines and failing to identify pipelines that were at high risk of failure. The maximum fine the utility faces is $3 million. The post-trial motions hearing is scheduled for Oct. 11.
U.S. District Court Judge Thelton Henderson slashed the total potential fine to $6 million from a possible $562 million on Aug. 2 following a request from the U.S. Attorney’s Office. The original amount was calculated as roughly double the estimated $281 million PG&E saved due to skirting pipeline safety regulations. At the time, prosecutors offered no explanation for the proposed reduction in fines.
In a statement following the verdict, PG&E chose to focus on the future of pipeline safety. “We have made unprecedented progress in the nearly six years since the tragic San Bruno accident and we are committed to maintaining our focus on safety,” PG&E said in an Aug. 9 press statement. The utility says it has spent $2.7 billion in recent years to enhance the integrity of its natural-gas transmission system.
Regulators also have sought to update rules for gas pipelines following the San Bruno explosion. In April 2016, PHMSA published a rule-making notice to update standards and tighten regulations for the inspection and integrity management of gas pipelines. The expanded regulations would create a new category for expansion and maintenance of pipelines and add new rules for pipeline mapping and inspection. The comment period for the new rules ended on July 7; the new rules are expected to be published this fall.